"I was hoping the market would be some kind of chaotic arena but
it's literally straight up right now," Michael Antonelli, an
equity sales tradeR at Robert W. Baird, told Business Insider
early Wednesday, referring to the rebound after the initial
sell-off.

Other senior figures on Wall Street echoed this sentiment. A top
buy-side trader told Business Insider early Wednesday that the
credit markets were "relatively calm." A senior figure at a top
high-frequency trading firm added that the initial reaction,
though dramatic, wasn't unexpected.

"This was similar to Brexit in that expectations didn't come
true," he said in the early hours of Wednesday. "It gets
expressed through volatility. US indexes, Treasuries, and dollar
pairs are very volatile — which is to be expected. MXN, Japan,
China and Aussie markets are all volatile."

That's the story so far. Wall Street has little confidence in
what happens next beyond the fact that we're likely in for a
bumpy ride. The word volatility was repeated in
just about every conversation with a Wall Streeter and every
research note. The market may have taken Trump's victory in its
stride, but another breakout of volatility is ahead.

"Recent nascent inflation will persist and pick up on the back of
the US and rest of world's tendency towards more protectionism
and fiscal stimulus (infrastructure spend in US and China)," Luke
Sadrian, chief investment officer of Commodities World Capital,
told Business Insider. "Another hard to quantify knock on effect
of Trump win will be that commodity and all asset market
volatility is likely to rise on the back of Trump's non-political
unpredictability."

Elsewhere:

"We expect the volatility regime to remain
high as Trump has shown on several occasions that he can be
unpredictable. Protectionism is an important threat for global
equities (here), and Trump has expressed a willingness to
renegotiate foreign trade agreements (especially NAFTA), which
brings more uncertainties." — Roland Kaloyan and team at Societe
Generale

"In our view, the full implementation of Trump's policy
proposals would increase the volatility of
aggregate economic activity, with potential repercussions for the
volatility of financial markets as well, and lead to tighter
monetary policy." — Kevin Logan at HSBC

"The market volatility is not necessarily a
vote for or against Trump or Clinton, but a reflection of the
uncertainty of what a Trump administration means for almost every
facet of economic policy. It's unclear how much of his campaign
rhetoric will translate to actual policies." — Markus Schomer,
chief economist at PineBridge Investments

"The bottom line, however, is that he has repeatedly proven
to be a volatile character with a very thin skin. In addition,
neither Trump nor many of his inner circle have any experience in
government. Those factors suggest to us that uncertainty and
market volatility will remain elevated for
months, if not years." — Paul Ashworth at Capital Economics

"We are heading into a world of unprecedented political risk
which calls into question the pillars of the post-WWII
settlement. It's unsurprising investors are heading for cover." —
Dominic Rossi, Fidelity International's global CIO of equities

"Volatility will almost certainly increase;
the fundamental reality is that we don't know what kind of US we
are now faced with given the lack of policy detail through the
campaign." — RBC Capital Markets

"Trump has no experience in government, and his tenure as
president will likely be marked with unconventional, and
potentially erratic, policymaking that departs substantially from
the political modus operandi of the past, whether Republican or
Democrat. This expectation of change was a major driver of his
popular appeal, but it is likely to unsettle markets." — Tina
Fordham at Citigroup

A part of this is a natural reaction. As Viktor Shvets at
Macquarie pointed out in a note to clients, investors are always
comfortable with the status quo. "Hence, its death tends to be
highly destabilizing, until new policies acquire the same
dogmatic value," he said. "But usually this is years later."

But there are two specific reasons volatility is likely to be
higher over the next 12 months than if Clinton had won.

First, as Business Insider's Brett LoGiurato argued Wednesday
morning, no one
knows anything. The polls were wrong, and it is getting
harder and harder to get an accurate read on what will happen in
the future. In a market increasingly driven by politics, that has
Wall Streeters unsettled.

Then there is Trump himself. In simple terms, he is an unknown
quantity with no experience in government at a time when the
world is getting only more complex.

"Unlike Brexit" — which is in limbo because of the Article 50
trigger — "this volatility spike is unlikely to die down quickly
given that there is no playbook for anticipating capricious
policy moves manifest via 3 a.m. tweetstorms," Milind Sharma at
hedge fund QuantZ Capital told Business Insider.